I spoke with one of the big banks today, regarding the early break fee department – who could’nt / would’nt help me or give me some semblence of an idea how much there fees could be if we pay out our fixed loan early.
Currently have 5 months to go and if breaking with the loan today they say I’ll owe $3040 in early break fees.
I have no idea if I arrange the sale & settlement of our property if say – 2 months before of 1 day before the fixed period finishes, if I will pay a early break fee of $30 or $3000.I understand they do not want to give an exact figure, as this would likely change, BUT They were unwilling to give me any rough idea of how it works, to help me steer on the right track.
Example – I would assume – Todays figure (5 months to go) is $3040
would I be correct in saying it would drop roughly $500 – $600 dollars every month closing in towards an early Feb date…., or ie: if settlement happens only a few weeks before the 7th of Feb – could I still cop thousands in fees….Help
Each bank applies there own formula to fixed rate break costs and it is tied in with the current variable rate so not possible to quote a break cost for the future as variable rates may vary come settlement date.
Your assumptions are correct as the break costs should decrease the closer you get to the expiry date of your fixed term and likely variable rates will be on hold for the foreseeable future with a decrease more likely than an increase early next year IMO.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
